The number of properties sold in England and Wales for over £1m in July increased by 34pc to 1,143, up from 852 a year earlier.

A pick-up in the wider economy saw repossession volumes fall 28pc in July to 1,187, down from 1,645 a year earlier.

The region with the greatest fall in the number of repossession sales was the North East where this figure dropped by 56 per cent to 25 sales in July.

Some commentators are concerned the continued rise in house prices could cause further pain for buyers who are already struggling to get on the housing ladder.

Nicholas Ayre, managing director of homebuying agency Home Fusion, said: "As expected, property prices continue to rise across the country, with London leading the way. However, one does start to wonder whether pricing is accelerating away from affordability and whether we will reach a point where buyers are once again struggling to get on the property ladder."

Dr Howard Archer, chief European and UK economist at consultancy IHS, said: "It is vitally important for economic stability and longer-term growth prospects that a new housing price bubble does not emerge. And there is a mounting danger that house prices could really take off over the coming months, especially if already significantly improving housing market activity and rising buyer interest is lifted appreciably further by the Help to Buy mortgage guarantee scheme which will take full effect in January.

"It is therefore of vital importance that policymakers closely monitor the situation and are prepared to act quickly and decisively if signs of the housing market overheating become increasingly widespread and pronounced."

A recent study of 2,000 under-35s found a third of aspiring first-time buyers have given up hope of owning a property and spent what they had saved for a deposit on holidays, cars and other luxuries.

Region

Monthly Change (August 2013 to September 2013)

Annual Change (September 2012 to September 2013)

Average Price (September 2013)

England and Wales

1.5pc

3.4pc

£167,063

London

1.9pc

9.3pc

£393,462

South East

1.0pc

4.4pc

£218,080

North East

2.7pc

1.3pc

£101,262

East

1.6pc

3.9pc

£180,017

Yorkshire and The Humber

1.0pc

1.6pc

£118,092

North West

0.7pc

0.6pc

£110,001

South West

0.3pc

2.1pc

£175,056

West Midlands

0.0pc

2.0pc

£130,443

East Midlands

-0.1pc

1.4pc

£123,967

Wales

-0.4pc

-1.7pc

£114,589

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